Is Alphabet (GOOGL) Fairly Priced After Strong Multi Year Share Price Gains?
Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. If you are wondering whether Alphabet’s current share price reflects its long term potential, you are not alone. This article is aimed at helping you make sense of what you are really paying for.…
Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide.
If you are wondering whether Alphabet’s current share price reflects its long term potential, you are not alone. This article is aimed at helping you make sense of what you are really paying for.
Alphabet’s stock last closed at US$339.71, with returns of 1.5% over the past 7 days, 7.8% over the past 30 days, 7.8% year to date and 65.2% over the last year. The 3 year return stands at 218.0% and the 5 year return at 229.8%.
Recent headlines have focused on Alphabet’s position in the broader technology sector and how market sentiment around large tech names has shifted. At the same time, discussions about regulation, competition and long term demand for digital services continue to shape how investors think about the stock.
On our checks, Alphabet has a valuation score of 2 out of 6. This means only some of the metrics we review point to the shares being undervalued. Next we will look at how different valuation methods line up before finishing with a way to frame valuation that can be even more useful than any single model.
Alphabet scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow, or DCF, model takes estimates of the cash a company could generate in the future and discounts those amounts back to what they might be worth today. It is essentially asking what a stream of future cash flows is worth in current dollars.
For Alphabet, the model starts with last twelve month free cash flow of about US$92.6b. Analysts and internal estimates then extend this out, with Simply Wall St using a 2 Stage Free Cash Flow to Equity model that includes explicit projections through 2035. For example, projected free cash flow for 2030 is US$194.5b, with a discounted value of US$130.8b. Earlier years between 2026 and 2029 have projected free cash flows in the US$72.3b to US$162.2b range, each discounted back to reflect the time value of money.
When all projected and extrapolated cash flows are added and discounted, the DCF model arrives at an estimated intrinsic value of US$322.53 per share, versus the recent share price of US$339.71. That implies the stock is about 5.3% above this DCF estimate, which is a relatively small gap.
Result: ABOUT RIGHT
Alphabet is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment’s notice. Track the value in your watchlist or portfolio and be alerted on when to act.
GOOGL Discounted Cash Flow as at Feb 2026
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Alphabet.
For a profitable company like Alphabet, the P/E ratio is a common way to think about what you are paying for each dollar of earnings. It links the share price directly to the business’s current earnings power, which many investors use as a quick sense check on valuation.
What counts as a “normal” P/E depends on how the market views a company’s growth prospects and risk. Higher expected growth or lower perceived risk can support a higher P/E, while slower growth or higher risk usually points to a lower one.
Alphabet currently trades on a P/E of 32.99x. That is above the Interactive Media and Services industry average of 13.72x, but below the peer group average of 41.71x. Simply Wall St’s Fair Ratio for Alphabet is 41.58x, which is its view of what the P/E might be given factors such as earnings growth, profit margins, industry, market cap and specific risks.
This Fair Ratio can be more tailored than simple peer or industry comparisons because it tries to adjust for those company specific features, rather than assuming all firms deserve the same multiple. With the current P/E of 32.99x sitting below the Fair Ratio of 41.58x, Alphabet’s P/E screens as lower than that benchmark.
Result: UNDERVALUED
NasdaqGS:GOOGL P/E Ratio as at Feb 2026
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1422 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your story about a company, where you spell out what you believe about its future revenue, earnings and margins, then link that story directly to a forecast and a fair value estimate. On Simply Wall St, millions of investors use Narratives on the Community page as an accessible tool that sits on top of the numbers and helps them compare their own fair value to the current share price. Because Narratives update when new information such as earnings releases or major news is added, your view does not stay static; it evolves as the facts change. For Alphabet, one investor might build a Narrative with very optimistic assumptions that lead to a high fair value, while another might use more cautious inputs and arrive at a much lower figure. This gives each of them a clear, numbers backed reason to consider buying, holding or selling based on how price and fair value line up.
Do you think there’s more to the story for Alphabet? Head over to our Community to see what others are saying!
NasdaqGS:GOOGL 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include GOOGL.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
